Powering the Pacific's Future a Challenge, but Progress is Clear - ADB

MANILA, PHILIPPINES - While energy security challenges faced by the Pacific are significant, energy efficiency and renewable energy options hold great promise for the region, according to the March issue of the Asian Development Bank's (ADB) Pacific Economic Monitor (PEM), released today.

Reliance on imported fuels for power generation hinders development in the region, where electricity prices are among the highest in the world and, on average, only around 25% of households have access to electricity.

"ADB is working closely with Pacific countries and development partners in improving energy efficiency and developing renewable energy to reduce the region's longstanding dependence on imported fossil fuels," said Robert Guild, Director, Transport, Energy, and Natural Resources in ADB's Pacific Department. "A number of Pacific countries have developed comprehensive sector plans and set ambitious targets to respond to challenges. There is definitely a lot of positive momentum on this right now."

The first of four special energy themed articles in the latest PEM is a contribution from the New Zealand Aid Programme that overviews the energy security challenges faced by the Pacific region. The paper presents many of the issues likely to take up much of the discussion at the Pacific Energy Summit convening this week in Auckland.

A second article profiles energy consumption and future energy demand in Fiji, Kiribati, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga and Vanuatu. The link between economic growth and energy demand is featured in the assessment.

Another article examines the effect of regulatory and ownership arrangements on the performance of power utilities in the Pacific. Using indicators from a Pacific Power Association benchmarking exercise, which were collected with the support of the Pacific Region Infrastructure Facility in 2011, the analysis finds independent price regulation, when accompanied by a commercial orientation, generally improved the efficiency and performance of power utilities.

The final article looks at the ways energy efficiency can be improved and the potential savings from greater efficiency in the Pacific region. The article highlights that greater efficiency can improve trade balances and promote job creation and economic growth. A case study of Samoa, where buildings were retrofitted and residential and street lighting upgraded with more efficient bulbs, shows that investments in energy efficiency essentially pay for themselves after a few years with the energy cost savings they yield.

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